Registration under Shops and Establishments Act

Registration of shop or Establishment under Shops and Establishments Act. Benefits of registration, Procedure for Registration, Documents Required and Inspection.

What is type of Entity Comes under Shop and Establishment Act?

All Commercial Establishments such as the hotels, and eateries, amusement parks, theatres, and other entertainment houses, as well as any other such public amusement places, come under the purview of the Shops and Establishment Act.

As per Section 5 of the Act "commercial establishment" means any premises wherein any trade, business or profession or any work in connection with, or incidental or ancillary thereto is carried on and includes a society registered under the Societies Registration Act, 1860 (21 of 1860), and charitable or other trust, whether registered or not, which carries on any business, trade or profession or work in connection with, or incidental or ancillary thereto, journalistic and printing establishments, contractors and auditors establishments, quarries and mines not governed by the Mines Act, 1952 (35 of 1952), educational or other institutions run for private gain, and premises in which business of banking, insurance, stocks and shares, brokerage or produce exchange is carried on, but does not include a shop or a factory registered under the Factories Act, 1948 (43 of 1948), or theatres, cinemas, restaurants, eating houses, residential hotels, clubs or other places of public amusements or entertainment;

Procedure to register under Shots and Establishments Act, necessary documents, legal requirements and statutory compliances are explained below:

Objects of Registration under Shops and Establishment Act

- To secure uniform benefits for employees working in different establishments in an organized manner for the Shop, commercial establishments and residential hotels to restaurants, theatres and other places of public amusement or entertainment, for the reason being an unorganized sector in India.

- To regulate the day-to-day treatment of employees and set a standard for employment.

Functions of Shops and Establishments Authority

- It regulates the sets rules for how many hours can be worked on a stretcher day and week,

- Issues the guidelines for spread-over, rest interval, opening and closing hours, closed days,

- Declares the national and religious holidays,

- Regulates the work, rules for employment of children, young persons, and women,

- It also sets the rules for annual leave, maternity leave,

- It also frames in the industry for the sickness and casual leave, rules for employment and termination of service.

- It also issues the manner and method for the maintenance of registers and records and display of notices and obligations of employers as well as employees.

- The terms of service and other work conditions of people employed in Shop and commercial establishments.

Check whether you are required to register under the Act

- Check and understand, if your business, which you are going to establish, is covered under the category of the shop and commercial establishment defined under the Shop and Establishments Act.

- If yes, then you are required to the adhere the norms and regulations set by the Act for treatment of their employees.

- Exceptions to the Act may vary from state to state. Check the respective state list of the Shop and establishment as every state has given a list of Shop and establishments to be covered under the Act, such establishments are required to run their business by abiding the rules and regulations pursuant to the Shop and Establishment Act.

- If your business is coming under the category which needs to be registered you need to file for registration under the Act, within 30 days of commencement of your establishment.

Benefits of Registering under Shops and Establishments Act

- The Registration gives your establishment a legal recognization

- It essentially forms as a basic license

- It can be used as a proof of your business to apply for other registrations required to run a business in India.

- This registration is mandatory for several reasons, including the opening of a current account in a bank.

- Also in case, you need to raise an investment through bank loans or from venture capitals, in that case also require the license or registration to prove their validity.

Steps to Register under Shops and Establishment Act

1. Download Application form from official Website

2. Fill the following Details

i. The name of the establishment

ii. Name and details of the owner (employer) and the employees (at the time of incorporation of business)

iii. The address of the establishment and a copy of sale deed or rental agreement for the shop

iv. Income Tax Permanent Account Number (PAN) of the business or the owner

3. Submit the filled application with the prescribed fees to the Department.

4. The application form shall be scrutinized by the authority and if all goes well the registration certificate shall be granted by the Chief Inspector of Shop and Establishment Act, or from other inspectors delegated, as the case may be.

Points to be remembered after obtaining Registration Certificate

- The inspector may visit at the establishment, if required.

- The Registration Certificate should be displayed in a visible place in the shop.

- If there is any change with regard to the employees or on expiry, it must be renewed

- Change in details or closure it must be informed to the inspector within 15 days

- Every state has different rules, however, the basic procedure shall remain the same.

- It is mandatory under the act to get approval of labour department in respective state

Inspection Procedure under Shops and Establishment Act

- Locating and identifying the Establishments

- Joint Team Inspection

- Inspection report

- Non-Compliance Notice to be sent if any

- Final Action to be taken, acceptance of compliance report or initiation of proceedings

Documents Required for Inspection

- Registration certificate under the Shop and Establishment Act

- Registers and records required to be maintained

- Record of holidays to employees, weekly and public holidays.

- Compliance of Time of payment of wages specified under the act.

- Details of Maternity benefits to given to eligible women employees

- Ensure that no illegal deduction is made

- Ensure that no wrong termination employee is violating the procedure under the Act.

- Ensure that children/women are employed in compliance with provisions of the Act.

Other Formalities for Business

- Get the certificate of registration under the shop and establishment act

- Comply GST Registration rule for your business.

- Register with MSME to avail benefits.